 Hello and welcome to the Monday market update with me, David Madden. Today's date is Monday the 17th of December, 2018 and the time has just gone at 9.15 GMT. It's been a fairly subdued start to the European session this morning. Most of the major European indices are slightly in the red. We had a fairly mixed session in Asia overnight. The lack of volatility was probably a common theme in Asia overnight. Submarkets finished, higher markets finished, lower overall. We haven't seen a whole lot of movements. Essentially traders are still nervous about the slowdown of the slowdown in the global economy. At the back end of last week on Friday we were disappointing retail sales figures and also industrial production figures out of China. That's the playing on traders' minds and also at the back end of last week we had underwhelming service PMI figures out of Germany. And we also had very disappointing manufacturing and service PMI figures out of France. So it kind of adds weight to the argument that the eurozone is slowing down as well. So it's obviously quite worrying where the eurozone is slowing down and also is China the second largest economy in the world. Over the weekend we heard from the Bank of International Assetments and essentially they stated that while central bank policy begins to kind of emerge years after the credit crisis and begins to kind of normalise and we head back to an era of moving away from absolute rock bottom interest rates, we could see further set-offs in global stock markets. So traders are still a bit nervous about that. That's essentially the kind of the major and that added to the ongoing of course political uncertainty surrounding Brexit. Theresa May's deal that she's managed to cobble together with the European Union is deeply unpopular within Westminster but also what's also very unpopular is the idea of a second referendum. And what's also very unpopular is the idea of a no-deal Brexit. So all this uncertainty continues on, rambles on. It's likely to be hanging over the British pound. And there's essentially the major topics and themes of the past 72 hours. And now take a look at some of the major markets and see what things are getting on. Like I said, European economic markets are a bit lower this morning but not too low. So take a look here at the FTSE 100. As you can see it's been in, you know, ever since August it's been losing quite a lot of ground. A fast example of a downward trend, lower lows and lower highs. Granted we are off the lows of last week but still the market is still very much in the downward trend. And while we were in below the fifth day of moving average, this blue line here coincides with the psychology important 7000 mark. And it's likely we could see further losses on the FTSE 100. So we could be heading back down towards the recent low this area here which comes into play at 6,678. And then we could, if we help go below that again, we could be heading back down towards 6,500. And like I said, any rallies are likely to run resistance in around the 7000 mark. And if you go beyond that, the area 7,220, 7,200, that could also pose a potential area of resistance on the FTSE 100. Taking a look now at what's going on on the DAX, the general market. So the general market is actually even in worth shape than the FTSE 100. As you can see here, if you draw a line from the highs of June to the highs of July and also to the highs of September, granted, they actually trade a bit above the particular trend line. But there's a classic example of a trend line resistance coming into play on the DAX, the Germany 30. While we were in below this trend line here, it's likely we could see further losses on the Germany 30. We've seen a steady series of lower lows and lower highs. A classic example of a downward trend. And once again, while we remain below this trend line here, we could see further losses. So if you do look to kind of push further to the downside on the DAX, we could be looking at retesting the recent lows, which come into play just south of 10,600, 10,584. And if you go beyond that, we could be looking at heading down to 10,400. Any valleys covered in resistance at the psychology important 11,000 mark. And then if you go beyond that, this blue line here at the fifth and the moving average might come into play, which is 11,328. I take a look now at the U.S. markets. And we did a very interesting move, very interesting finish on the close on the S&P 500 last Friday. Have you taken the S&P? Sorry, we're currently looking... That's the Dow Jones. I'll look at the S&P 500 and then I'll come out of the Dow Jones in a second. A very interesting... We could see a very interesting session with the S&P 500. If you draw a trend line between the lows of February 2016 and November 2016, you get this trend line here. And as you can see, zooming in, this trend line was well respected back in October and also in November. And so the more trend line is respected, the more times the market bounces off trying to support, the more conflict you can become. The market is going to hold above it. But whenever you drop back below it, that trend line could then actually go from being a support line to being a resistance line. So as you can see here on a couple of occasions recently, it's managed to bounce off of it. We did trade below it, bounced around it, and as a Friday, we closed firmly below it. We closed just south of the psychology-important 2,600 mark. Now, the index features are promising that we're going to open above 2,600, but we're still well below this trend line support here. So this trend line may actually now begin to act as a resistance. And what we could potentially see is we might see the market rally back up towards this trend line in around the 2,644 region before potentially turning lower yet again because we have seen a few examples of lower highs. We've also seen a couple of lower lows as well on the S&P 500. And if you do manage to take out the recent low, a 2,582, that could take us back to a level not seen since April in a 2,553. And he moved to the upside, likely to run into resistance in around the psychology-important 2,700, and then beyond that 2,800. One of the tenets of Dow theory is that the averages must confirm each other. And as you saw there, the S&P 500 was previously being supported by the trend line support from the lows of February 16, the lows of February of November 2016 as well. Similarly, if we take a look here at the Dow Jones, if you draw a trend line between the lows of February, March, April, May, you get this trend line along here. And there's a few occasions, granted, for the market to manage to trade below it, but it did always manage to close back above it until now. And now what we're seeing is, similar to the S&P 500, the Dow Jones is closed firmly below its respective trend line. And Dow theory says the averages must confirm each other. So when both averages were above the respective trend line supports, you can be more confident both markets are going to move higher. Now that both markets have closed firmly below the respective trend line support, so you can be more confident that both markets are going to move lower. Obviously, if one goes above the trend line, one remains below it, you can then be less confident of which way the market is going to move. But while both are heading in the same direction, you can be more confident that that particular move, and in this case, that downward move is going to continue. So the index futures are suggesting the Dow Jones is going to open north of 24,000. And even if you do manage to open north at 24,000, we could have a scenario where we might head up towards this trend line year in around the 24,600 region before potentially turning lower yet again because we've seen a nice series of lower lows and also lower highs and lower lows along here on the Dow Jones. If you do take out 24,000 and if you do take out 23,877, that could take us back towards the may lows of 23,539. Any rallies in the Dow Jones, if you manage to go back above the trend line support, may run into resistance at this red line here, the two-digit moving average, which comes into play just south of 26,000. We could see in the number of occasions it act as both support and resistance recently. And if a metric has acted as both support and resistance recently, it makes it the more likely it will do so again in the future. Take a look now at what's going on in the gold market. So gold at a size will sell off between April and August. Ever since August, the market has been broadly been pushing lower. Sorry, apologies. It's only been pushing higher. It's been recovering at a slow and steady enough rate. So it's seeking a higher high, higher low, higher high, higher low, higher high. And we hit a monthly month high only at the early point of this month. So we're broadly ever so slowly grinding out higher highs and higher lows. So if you do manage to continue on this kind of upward trend that's been in play since August, we could be looking at targeting this area here in around the 1265 area. Any move to the downside, it may count as support in around 1225. This blue line here, the 50 moving average. And you'll notice how it acted as support on a couple of occasions recently. And once again, if a market has acted as support recently, it makes it more likely to act as support again in the near term. And even if you do drop below 1225, if it allows you to remain above the kind of cycle as important as 1200, the outlook for gold could remain positive. Take a look now at what's going on on the oil market. The oil market has stabilized a lot recently. And the last five or six trading sessions, it's been very quiet in comparison to the previous number of weeks. So looking at our Brent crude oil, we can see here that after hitting a multi-year high in October, is in a very aggressive downward trend. A classic example of lower lows and lower highs. And we are off the lows of the, we're above the November lows, but we haven't really made that much ground. I would argue that there is some sort of a bit of a bottom forming in around here. And while we remain off the November lows, which come into play, which with the November lows are in the region of 5750, while we remain above the November lows, we could see the market push on higher. So we could see the market heading back up towards the $65 a barrel mark or $67.50 a barrel mark. But ultimately, we're very much in a downward trend. And should we take off the November lows, that would actually be quite bearish in itself. And that would point to levels not seen for over a year if we managed to take off the November lows. And we could be likely heading back down towards $56.73 or back down towards $55 a barrel. And keep an eye on what's going on now on the WTI market. In a very similar situation, after hitting about a year high in October, undergone a very, very aggressive sell-off. As you can see here, the lower lows and lower highs all the way down. Similar situation here. We're above the November lows, $49.29. While we remain above that, and while we can hold above the $50 a barrel mark, we could see the market push on higher from here because there's not a bargain under us. Potentially looking to get a snap up relatively cheap oil. And if you do manage to kind of push on higher from here, we could be likely heading back up towards this region here in just north of $58 a barrel. And if you go beyond that, the kind of cycle actually borne $60 a barrel then becoming an area to keep an eye on which coincides with this blue line here, the 50 moving average. If you do manage to take off the recent low, the November lows of $49.26, we could be looking at heading back down towards $47 a barrel. And if you do manage to hit that area, keep in mind we haven't seen $47 a barrel on WTI since September, since September 2017. So we will be talking about 50 month lows should they be reached. Take a look now what's going on on the euro versus US dollar. So as I mentioned, it's a disappointing economic indicators that are France and Germany last Friday. There's an ongoing political uncertainty over the budget in Italy as well. So the euro has been pretty much looking at a downward trend since September, which fits in with the wider downward trend since April. So while we continue to, while we can essentially hold below the kind of 115, 115 10 mark this area here, it's likely we could move further ground and we could be looking at retesting the November lows of one spot of $21.16. And then if you go below that, we're heading back down towards the one spot 11 10 region. And he moves to the upside. I like to run into resistance in a one spot 15 or one spot 15 10. And then if you go beyond that, we could be looking at heading up towards the September high, which comes to the play just north of 118. Take a look now at pound dollar. Like I said, there's a lot of uncertainty hanging over the pound because of Brexit. To be perfectly honest, it seems to me that they policy the politicians at Westminster don't seem to know what's going on in relation to Brexit, in relation of what's going to happen next. So therefore, how are the financial markets supposed to know? Ultimately, it's about this. If it appears that the UK is going to have a relatively soft speaking Brexit, or it's the softest kind of Brexit possible, that it's likely to be beneficial to the pound because it'd be good for business and it'd be likely that there'd be a minimal economic disruption or financial disruption because of the UK's departure from the European Union. But on the flip side of the coin, if it looks like we're heading towards a scenario where there's a no deal of Brexit even by purpose or by accident, if it looks like we're heading towards a no deal of Brexit scenario, that's likely to put a lot of pressure on the pound. Even though some of the economic indicators out of the UK have been fairly strong in recent months and in my view, the UK economy is in better shape than the Eurozone, it's the Brexit uncertainty that is hanging over and it's very evident here. The pound sold off heavily between April and August. Staged a bit of a comeback, but since September, once again, the uncertainty has kind of kicked back in. And like I said, it was only last week. It was only last week we were actually back at levels not seen since April 2017 on the pound versus the US dollar. Very much to the downside as a trend. If pressure comes on the pound again, we could have looked at heading back down towards the recent lows of one spot 2467. And if you go below that, we could be likely heading back down towards the 12365 area. Any move to the upside in the pound dollar are likely to run into resistance in around the kind of one spot, 2750 area. And then if you go beyond that, there are these big kind of psychological numbers to keep Maya for. Take a quick look at the week ahead and the week ahead article can be found on our website. If you go to cmcmarkas.com and under news and analysis, you will find the week ahead article. So scrolling ahead, later today in about half an hour time, we have Eurozone CPI numbers coming out. Tomorrow and Tuesday, FedEx have second quarter figures out. Darwin Restaurants have second quarter figures out. Also on Tuesday, on Wednesday, we have the update from the Federal Reserve and it's the market is pricing in a rate of a rate rise of 0.25%. But keep in mind, Jerome Powell, the head of the Federal Reserve, said a couple of policy makers at the Federal Reserve believe that the Federal Reserve's interest rate is near or getting close to the, it's getting close to the neutral rate. So the update and the statement that will follow the Fed meeting on Wednesday will be closely watched. On Wednesday, we have UK CPI numbers out. On Wednesday, we have Canadian CPI and retail sales figures out. On Thursday, we have the Bank of Japan interest rate decision. On Thursday, we have the Bank of England interest rate decision. And on Thursday, we also have the UK retail sales. Just also worth pointing out, for those of you on our trading platform, keep an eye on the insights section of our trading platform. If you're going to mark a pulse, the second option down is insights. Some of the updates that we do in terms of written content for myself and other analysts get posted to insights. Some of it gets posted to our news site, which I will show you in the week ahead article. It's also worth keeping it off for the chart form section. The chart form section can be once again found under the mark of pulse and the chart form section can be updated by anybody. Myself and some of the other analysts regularly provide effective a screenshot of a particular market and this comment on what we think what kind of price action that we could see. That's also free for any of our clients to actually contribute to as well. So please feel free to do so. Lastly, if you have any comments on this video or any of the other videos we've made here at CMC Markets, please feel free to review and review reviews. And that's all for me this week. Thank you very much.